Inflation-linked Treasury Bonds were first issued in 1964 and were referred to as 'Savings Bonds', indicating their role to promote savings among the general population. Currently, there are three Inflation-linked Treasury Bonds outstanding. The series are RIKS 21 0414, first auctioned on April 9th 2010, RIKS 30 0701 issued in July 2011, and RIKS 33 0321 issued in March 2012, not yet a benchmark series.

Since HFF-Bonds are government-backed securities issued in large series they have assumed the role of inflation-linked benchmarks.

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Today, 10 February 2015, an auction was held by The Central Bank of Iceland in which the Bank offered to purchase euros versus payment in the indexed Treasury series RIKS 33 0321. This measure is an element in the removal of restrictions on capital account transactions and will reduce the annual Treasury’s refinancing need. Bonds sold in the series amounted to 354,655,174 kr. nominal value.

The accepted exchange rate in the auction was 178 krona for each Euro.

Bids submitted at the price of 178 krona pr. Euro were reduced proportionally by 44.1011%.

On 6 February the fixed price for this Treasury bond was announced as 112.785619 kr. with accrued interest and indexation (e. dirty price) with a settlement date of 13 February 2015 (yield 2.88%)1

According to an announcement published by the Central Bank of Iceland on 9 December 2014 regarding the Central Bank of Iceland foreign currency auction to be held on 10 February 2015, the Terms of Auction stated that the swap rate for the Bank’s purchase of foreign currency in connection with the sale of Treasury bonds in the series RIKS 33 0321 would be published at the close of business on 6 February 2015.

It has been decided that the number of Treasury bond units per euro shall be based on the auction price and the fixed price of the Treasury bonds, which is 112.785619 kr. per Treasury bond unit with accrued interest and indexation (dirty price), assuming a settlement date of 13 February 2015 (yield 2.88%).1

Today, 2 September 2014, an auction was held by The Central Bank of Iceland in which the Bank offered to purchase euros versus payment in the indexed Treasury series RIKS 33 0321. This measure is an element in the removal of restrictions on capital account transactions and will reduce the annual Treasury’s refinancing need. Bonds sold in the series amounted to 82,122,672 kr. nominal value.

The accepted exchange rate in the auction was 181 krona for each Euro.

On 20 June the fixed price for this Treasury bond was announced as 109.098983 kr. with accrued interest and indexation (e. dirty price) with a settlement date of 5 September 2014 (yield 3.05%)1

According to an announcement published by the Central Bank of Iceland on 15 July 2014 regarding the Central Bank of Iceland foreign currency auction to be held on 2 September 2014, the Terms of Auction stated that the swap rate for the Bank’s purchase of foreign currency in connection with the sale of Treasury bonds in the series RIKS 33 0321 would be published at the close of business on 290 August 2014.

It has been decided that the number of Treasury bond units per euro shall be based on the auction price and the fixed price of the Treasury bonds, which is 109.098983 kr. per Treasury bond unit with accrued interest and indexation (dirty price), assuming a settlement date of 5 September 2014 (yield 3.05%).1

Government Debt Management intends to offer index-linked series, RIKS 33 0321, in connection with the foreign currency auction on 2 September 2014. The asking price of the series for the auction will be announced after the market close at 16:00 on 29 August 2014.TermsofAuction.(pdf)